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10 ways HMRC knows if you’re a tax cheat

11 July 2017

It is right to say that the chances of being caught cheating your taxes has never been higher. In this weekend’s Financial Times article, tax dispute resolution partner Dawn Register lists the top 10 ways that HMRC currently catch people fiddling their UK taxes.

The article includes commentary and ideas from the BDO tax disputes team based on our experience of handling hundreds of HMRC enquiries and serious investigations at any one point in time.

A range of tools at their disposal

Many people come to us asking if their HMRC enquiry is random. The answer is very rarely. Most enquiries are now based on intelligence that is risk assessed and analysed by qualified tax inspectors. 

This is helped by HMRCs increasing use of technology to process data from other government agencies and third parties such as banks. New financial data from over 100 countries will flow to HMRC after September 2017 under the Common Reporting Standard (CRS); HMRC describe this as a "game changer" in their battle against offshore tax evasion and avoidance. The increasing use of online filing also means data is cross referenced and checked faster than ever before. 

Many people think they will never be caught because of limited resources at HMRC and the fact that they see themselves as 'small fry'. We consider this to be a dangerous and misguided view. As the article shows, HMRC are a sophisticated operation and 'getting caught' is, we would suggest, a risk not worth taking.

You can read the full article below (behind a paywall) as well as viewing the accompanying YouTube video which summarises our guidance.

For anyone with concerns about their UK tax affairs, HMRC runs a number of voluntary disclosure programs. The BDO tax disputes team has vast knowledge and experience of guiding people through these confidential and bespoke processes. Please contact us for a no-obligation consultation.

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